Indiana P&C Study Guide

The commercial half of this exam is where Indiana’s own machinery shows up hardest — a guaranty association with an exception built into its cap, a comparative-fault statute with a carve-out that reverses the answer, a workers’ compensation system with two different clocks, and a rate-regulation scheme that splits personal from commercial. In three of those four, the exception is worth more marks than the rule.

The guaranty cap, and the claims it does not cap

The Indiana Insurance Guaranty Association (IC 27-6-8) covers claims against insolvent property and casualty insurers. Under IC 27-6-8-7(a) it pays covered claims up to $300,000 per claim — and all claims arising from the bodily injury or death of one person count as a single claim, which stops a claimant from stacking separate heads of damage into separate caps.

Now the exception, which is the exam item: workers’ compensation claims are paid IN FULL. The $300,000 cap does not touch them. Indiana treats an injured worker’s statutory benefits as something the safety net must carry completely, and a question about a failed comp carrier is testing exactly that.

Three further limits sit alongside: there is no per-claim dollar deductible, high-net-worth insureds are excluded from association coverage entirely, and a payment never exceeds the policy limit — the association steps into the insurer’s shoes, it does not improve on the contract.

Comparative fault — and the government exception that reverses it

Indiana applies modified comparative fault under the Comparative Fault Act, IC 34-51-2. A claimant whose fault is greater than the combined fault of all others recovers nothing; below that line, the award is reduced by the claimant’s own share. Practitioners call it the 51% bar.

The carve-out is the most-missed fact in Indiana casualty material, so learn it as part of the rule rather than as a footnote: the Comparative Fault Act does not apply to claims against governmental entities, which remain governed by contributory negligence (IC 34-51-2-6). Against a city, a county or a state agency, a claimant who bears any share of fault recovers nothing.

That means the same collision produces two different outcomes depending on who the defendant is. Put a municipal truck into the scenario and the comparative-fault answer becomes the wrong one.

Workers’ compensation runs on two clocks

Coverage is mandatory under IC 22-3-2-5 for essentially all employers with one or more employees — no small-employer threshold to remember, unlike the states that start at three or five. Certain classes are excepted by statute, including some governmental, banking and building-and-loan entities that self-insure. The system is administered by the Worker’s Compensation Board of Indiana (IC 22-3-1), not by IDOI.

The benefit structure: temporary total disability pays 66⅔% of the average weekly wage, for up to 500 weeks (IC 22-3-3-8). A statutory maximum weekly benefit applies on top, and Indiana resets it annually by injury year — so treat the structure as the thing to memorise and any specific dollar figure as perishable.

Then the two deadlines, which items routinely swap for one another. Notice to the employer within 30 days of the injury (IC 22-3-3-1). Claim filed within 2 years of the accident, or of the last compensation payment (IC 22-3-3-3). Different clocks, different consequences: missing the notice is not the same failure as missing the limitation period.

An employer complies by insuring with a licensed carrier or by qualifying as an approved self-insurer (IC 22-3-5). Those are the two routes.

Rates: file-and-use, except when it isn’t

Indiana regulates rates under IC 27-1-22-4, and the label depends on the book. Personal lines are file-and-use — competitive rating, with rates effective on the filing date or a later specified date. Commercial lines are use-and-file. Most national material collapses Indiana into a single label; the exam does not.

The substantive standard is constant across both: rates must not be excessive, inadequate, or unfairly discriminatory. That triplet is worth memorising verbatim, because items are frequently built by omitting one of the three.

The residual market and the surplus-lines door

When the admitted market will not write basic property coverage, the insurer of last resort is the Indiana Basic Property Insurance Underwriting Association — the FAIR Plan (IC 27-1-29.1). Indiana’s dominant catastrophe perils are tornado and severe thunderstorm, bringing hail and straight-line wind, along with river and flash flooding and winter storms. No hurricane fund, no earthquake pool.

Placing a risk with a non-admitted insurer is a separate credential and a separate discipline. Under IC 27-1-15.8 you need an active Indiana property and casualty producer licence plus a Surplus Lines licence, and you must make a diligent effort to place the risk in the admitted market first. Surplus lines is not an alternative to the admitted market — it is what remains after the admitted market has genuinely been tried.